David Fickling is a Bloomberg Gadfly columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.

(Corrected )

Will any company that's not had a takeover bid from China's HNA Group over the past year please stand up?

The offer Wednesday to buy out remaining minority shareholders in Tysan, a Hong Kong-based foundation engineer, brings total acquisition spending by the owner of Hainan Airlines and its associates to almost $20 billion over the last 12 months.

Retail Therapy
The value of deals proposed by HNA Group has surged over the past year
Source: Bloomberg data
Note: Doesn't include investments by associate companies.

Little more than a week ago, HNA offered $1.5 billion in cash for the Swiss airline catering business Gategroup, joining the cargo handler Swissport, which it agreed to buy last July for $2.8 billion. The company has purchased a $420 million stake in Brazil's third-largest airline; $500 million-worth of the travel-booking website Tuniu; and a holding in Uber China. Associated companies Bohai Leasing and Tianjin Tianhai have spent $7.6 billion on an aircraft-leasing firm, Avolon, and $6 billion on the electronics distributor Ingram Micro.

HNA also joined in the bidding for companies including the hotel chains Carlson Rezidor and Starwood, as well as London City Airport, according to Bloomberg News reports. For good measure, Sky News of the U.K. reported last week that the Chinese company was looking to acquire a stake in Monarch Airlines.

That's quite a spree for a company whose main operating asset is one of the world's most-indebted airlines.

Illustrious Company
In debt terms, HNA is one of the world's major companies. In profit terms, not so much
Source: Bloomberg data, HNA bond prospectus
Note: Net debt figures are for latest filings, operating income for trailing 12-month. HNA net debt figure is for Sept. 30, 2015, operating income is for 12 months through December 2014.

How is all this going to be paid for? HNA is closely held and controlled by the provincial government of Hainan Island, so it doesn't routinely publish full financial accounts. But you can get a pretty detailed picture from the prospectus for the 2 billion yuan ($309 million) of 7 percent bonds the company sold earlier this month.

In the 15 quarters through Sept. 30, HNA had operating cash flows of about 50 billion yuan. A further 116 billion yuan was raised from financing, and 135 billion yuan was spent on investments.

Operating activities amounted to only about two-thirds of earnings, with the remainder coming from non-operating revenue, such as dividends paid on investments and asset revaluations.

Brought Down to Earth
Air transport only accounts for about a fifth of HNA Group's operating income
Source: HNA bond prospectus
Note: 2014 figures.

As a business model, that sits somewhere between an industrial conglomerate and an investment fund. Also like an investment fund, HNA isn't shy of leverage. At the end of 2014, it had net debt of about 111 billion yuan, a larger sum than that owed by McDonald's:

Big Brother
HNA Group's debts have been growing rapidly
Source: HNA Group bond prospectus

None of this necessarily matters as long as HNA has the earnings and liquidity to meet its debt payments promptly, and the operating performance to deliver rising profits. Things don't look too hot on that front, though. Take a look at HNA's quick ratio and interest cover, which gauge its ability to meet short-term liabilities and pay its interest out of income.

Both are around or below their respective safety levels of 1 and 1.5 times. Return on assets hasn't cracked above 1 percent throughout the period, suggesting the group would have been better off sticking its money in the bank.

HNA's performance metrics leave a lot to be desired
Source: HNA bond prospectus

As we've seen with Anbang Insurance's recent shopping spree for offshore hotels and financial businesses, the usual financial constraints often don't apply when it comes to well-connected Chinese companies following Beijing's push to invest globally. So there's no reason to look a gift horse in the mouth if HNA turns up at your headquarters waving a checkbook. But it might be as well to ask for cash.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

(Fixes description of Monarch Airlines in fourth paragraph to remove reference to charters.)

To contact the author of this story:
David Fickling in Sydney at

To contact the editor responsible for this story:
Paul Sillitoe at